The number of eBay members online today is incredible. EBay has succeeded in redefining the way the general public buys and sells just about anything, as well as how the world communicates with one another. The reasons for the success and popularity of eBay really come down to a few things: membership, choice, value, and communication. This paper will discuss the success of the eBay phenomenon, emphasizing how its innovative method of global communication filled a much-needed void in the consumer marketplace.
In 1995, Pierre Omidyar, a Silicon Valley software engineer, created website so his girlfriend could find other collectors of Pez dispensers (Avis, 2002). To his surprise, droves of people came to the site wanting to trade various types of collectibles. He slowly expanded the Web site, eventually quitting his job to accommodate the overwhelming pressures of his new and successful site, which was generating thousands of dollars in fees per day.
Today, eBay is one of the highest traffic sites on the Internet, with 41 million members around the world (Avis, 2002). The site generates about 1.5 billion page views per month. EBay provides a source of worldwide communication to buyers and sellers from all markets. According to Forrester Research, eBay reported $15 billion in sales in 2002, as well as a market capitalization of $24 billion (Hill, 2003). Naturally, globalization has played an enormous role in the eBay phenomenon, as international business already accounts for about 15 percent of eBay's total annual revenue. .
The sole purpose of eBay is to provide a communication link (Avis, 2002). It is a place where buyers and sellers from around the world can meet to trade. However, rather than existing as a huge classified ad site, every sale is done through an auction. Over a given period, anyone with an interest in the product that is being sold can enter a bid. The bids are shown in real time and at the end of the auction; the current highest bidder buys the product.